EXHIBIT 10.5
EMPLOYMENT AND NON-COMPETITION AGREEMENT
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This Agreement is entered into by and between ISE Labs, Inc. and its
successors and assigns ("ISE"), on the one hand, and Sassan Raissi ("Employee")
on the other hand. The effective date of the Agreement is the date of
acquisition of Digital Test Services ("DTS") by ISE.
WHEREAS, ISE desires to employ, retain and make secure for the
companies the experience and services of Employee, being one of the key
employees of ISE:
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Employment
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1.1 Period. ISE shall employ Employee as President of DTS in Santa
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Clara, California and Employee shall perform services for and continue in the
employment of ISE for the period commencing on the date hereof through September
30, 2000 ("The Employment Period") subject however, to prior termination by
either party as set forth in Article III herein.
1.2 Base Salary and Employee Benefits. During Employee's employment
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hereunder, ISE will pay to Employee a base salary of not less than $175,000 per
year, subject to regular base salary review in accordance with ISE's
compensation policy. ISE shall also provide to Employee such employee benefits
provided to all ISE's other employees.
1.2.1 Sign-On Bonus. Employee will be paid the sum of $2,000,000
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(two millions) within 5 days of the effective date of this Agreement.
1.2.2 Other Compensation. Employee will be paid the sum of
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$1,500,000 (one million and five hundred thousand dollars) based on the
achievement of milestones mutually agreed to by Employee and ISE and the
successful integration of DTS and ISE as mutually agreed to by Employee and ISE.
1.2.3 Stock Options. Based on approximately 17.5 million shares
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(post-split) held by the owners of ISE prior to the DTS acquisition, and the
creation of an Employee Stock Option Plan (ESOP) with 3.5 million shares,
Employee will be granted Non-Statutory Stock Options for 750,000 (post-split)
shares under the ESOP plan. The Stock Options granted Employee shall have a
strike price equal to fair market value on the date of the grant. Normal ESOP
vesting is 25% after one year and a 6.25% vesting every quarter thereafter.
Employee's Stock Options will vest on an expedited schedule as follows: 50% of
the options shall vest on the first anniversary after signing of this Agreement
and 12.5% of the options vesting every quarter thereafter. The Employee will be
fully vested on the second anniversary of this Agreement. In addition, if ISE
is acquired by another company, all of Employee's stock options will vest
immediately.
ARTICLE II
Non-Competition
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2.1 Non-Competition. Employee agrees that for a period of three
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years from the effective date of this agreement, the Employee will not (a)
engage in competition with ISE in the performance of any services that directly
relates to testing of semiconductor devices as conducted by ISE prior to the
effective Date of this Agreement, or (b) induce any employee of ISE or DTS, who
at the time of such inducement is an employee of ISE or DTS, to terminate his or
her employment, except as otherwise may be required in the performance of
Employee's duties to ISE or DTS.
Notwithstanding the foregoing, Employees may own, directly or
indirectly, solely as an investment, up to one percent (1%) of any class of
"publicly traded securities" of any person or entity which owns a business that
directly competes with ISE. For the purposes of this Section 2.1, the term
"publicly traded securities" shall mean securities that are traded on a national
securities exchange or listed on the National Association of Securities Dealers
Automated Quotation System.
Notwithstanding the foregoing, Employee will not be prohibited from
competing with ISE, if ISE, or any entity deriving title to its good will or
shares, ceases to carry out the business of testing semiconductor devices.
2.2 Savings Clause. If any restriction set forth in Section 2.1
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above is held to be unreasonable, then both parties agree, and hereby submit, to
the reduction and limitation of such prohibition as shall be deemed reasonable.
ARTICLE III
Termination of Employment
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3.1 Death. In the event of Employee's death during the term of his
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employment hereunder, ISE shall pay to Employee's estate within ten (10) days of
notice of Employee's death the sign-on bonus and other compensation as set forth
in Sections 1.2.1 and 1.2.2 under the terms therein (unless such amounts have
already been paid to Employee) and any unpaid salary and benefits due to
Employee through the date of Employee's death.
3.2 Termination of Employment by ISE With Cause. Employee's
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employment hereunder may be terminated by ISE for Cause by giving Employee
written notice of such termination. For the purposes of this Agreement, "Cause"
shall be limited to: (a) Employee's willful failure to perform his or her
assigned job duties (other than as a result of sickness, accident or similar
cause beyond Employee's control) after receipt by Employee of not less than two
written warnings setting forth the specific performance deficiencies and a
reasonable period of time, not less than thirty (30) days, to cure such
performance deficiencies; (b) Employee's engaging in willful misconduct that is
demonstrably and materially injurious to the interests of ISE; (c) Employee's
misappropriation of ISE's material property or proprietary information; or (d)
Employee's conviction of a felony that is materially injurious to the business
reputation of ISE.
2.
Employee may be terminated for the reasons set forth in (a), (b), (c)
or (d) of this section. In the event that Employee is terminated for cause, ISE
shall pay to Employee the Sign-On Bonus and Other Compensation as set forth in
sections 1.2.1 and 1.2.2 under the terms therein (unless such amounts have
already been paid to Employee); and any unpaid salary earned through the date of
termination with Cause and such payment shall be made by ISE to Employee on the
date Employee is terminated with Cause.
3.3 Termination of Employment by ISE Without Cause. Employee's
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employment hereunder may be terminated by ISE without Cause upon ninety (90)
days written notice to Employee. In such event ISE shall pay to Employee the
Sign-On Bonus and Other Compensation as set forth in sections 1.2.1 and 1.2.2
under the terms therein (unless such amounts have already been paid to
Employee); and any unpaid salary earned through the date of termination without
Cause and such payment shall be made by ISE to Employee on the date Employee is
terminated without Cause. ISE shall also pay to Employee a severance amount
solely equal to three months base salary.
3.4 Termination of Employment for Certain Reasons. Employee may
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terminate his employment with ISE hereunder for Certain Reasons. "Certain
Reasons" shall mean: (a) a reduction in cash compensation, or a material
reduction in employee benefits, each of which does not generally affect ISE's
employees; (b) a material demotion of job duties or; (c) relocation in excess of
one year of Employee's regular workplace from Santa Clara and Alameda Counties,
California, provided however, that in each event, Employee has provided ISE
written notice of Employee's intention to terminate for Certain Reasons, stating
the Certain Reasons and ISE has not cured the Certain Reasons within fifteen
(15) days after receipt of Employee's written notice. In the event of
Employee's termination for Certain Reasons, ISE shall pay Employee the Sign-On
Bonus and Other Compensation as set forth in sections 1.2.1 and 1.2.2 under the
terms therein (unless such amounts have already been paid to Employee); and any
unpaid salary earned through the date of termination for Certain Reasons and
such payment shall be made by ISE to Employee on the date Employee terminates
employment for Certain Reasons. ISE shall also pay to Employee a severance
amount on the date of termination for Certain Reasons. The severance amount
will be equal solely to three months base salary.
3.5 Termination of Employment by Employee Without Certain Reasons.
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Employee may terminate his employment with ISE hereunder for any reason, without
cause, with a three months written notice. In such event, ISE shall pay to
Employee any unpaid salary earned through the date of termination without
Certain Reasons and such payment shall be made by ISE to Employee on the date
Employee terminates employment without Certain Reasons.
ARTICLE IV
Miscellaneous
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4.1 Successors, Assigns, Merger. This Agreement shall be binding
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upon and shall inure to the benefit of ISE and its successors and assigns. This
Agreement shall be
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binding upon Employee and shall inure to his benefit and to the benefit of his
heirs, executors, administrators and legal representatives, but shall not be
assignable by Employee.
4.2 Entire Agreement. This Agreement constitutes the entire
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agreement between ISE and/or DTS and/or Alphatec USA, Inc. and Employee relating
to his employment with any of such parties and the additional matters herein
provided for. This Agreement supersedes and replaces any prior verbal or
written agreements between such three parties, including the Employment
Agreement (the "Prior Agreement") entered into by Employee in connection with
the sale of DTS to Alphatec USA, Inc. By executing this Agreement, Employee
agrees that he is not entitled to any compensation under said Prior Agreement
and will not have and will not assert any rights or benefits thereunder. ISE is
aware of payments to be made to Employee by Alphatec USA, Inc. under the Prior
Agreement on or about the effective date of this agreement. Such payments are
the responsibility of Alphatec USA, Inc. and ISE will not make up for any or all
payments not made by Alphatec USA, Inc. This Agreement may be amended or
altered only in writing signed by ISE and Employee.
4.3 Applicable Law Severability. This Agreement shall be construed
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and interpreted in accordance with the laws of the State of California. Each
provision of this Agreement is severable from the others, and if any provision
hereof shall be to any extent unenforceable it and the other provisions hereof
shall continue to be enforceable to the full extent allowable, as if such
offending provision had not been a part of this Agreement.
4.4 No Setoff. No amounts payable and due to Employee by ISE
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herein shall be made without set-off or counterclaim.
4.5 Expense. In the event of any action (at law, equity or in
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arbitration) between or among any of the parties to this Agreement alleging a
breach of this Agreement or seeking enforcement of this Agreement, the
prevailing party shall be entitled to recover his reasonable attorneys' fees and
costs of such action from the non-prevailing party.
4.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
Dated: October 1, 1997.
ISE, INC.
By: /s/ Saeed Malik
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Saeed Malik
Its: President
EMPLOYEE
/s/ Sassan Raissi
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5.